Livestock and property businesses can face claims or investigations arising from the decisions directors and managers make, employment matters, the conduct of the company, regulatory obligations and internal crime or fidelity exposures. Management Liability should be reviewed around the way the business is owned, managed and staffed.
Most livestock and property businesses have directors or principals making commercial decisions, employees with workplace entitlements and obligations, licensing and regulatory requirements, and often more than one entity, branch or trading location. Those responsibilities sit with the people running the business, not only with the buildings, vehicles and equipment it owns.
Allegations about a management decision, a dismissal, the conduct of the company or a possible breach of legislation are handled differently from ordinary property or liability claims, and they can generate legal costs long before any liability is determined. Management Liability policies are packaged differently by each insurer, so it helps to check the sections selected against how the business is owned, managed and staffed.
Depending on the policy arranged, common exposures to review may include:
Allegations against directors, officers or managers arising from decisions or conduct in their management capacity, depending on the policy.
Claims involving matters such as unfair or wrongful dismissal, discrimination, bullying or harassment may fall within an employment practices section, subject to wording and circumstances.
Certain claims may be made against the company itself rather than only an individual director or manager. Cover depends on the policy structure.
Certain investigation or defence costs arising from alleged breaches of legislation may be considered. Fines or penalties are only insurable where legally permitted and covered by the policy.
Some Management Liability policies include crime or fidelity cover for specified direct financial losses caused by employee dishonesty or other defined fraud events. If the business handles client or trust money, confirm whether the Crime or Fidelity section extends to money held for others, and any sublimit or conditions that apply.
Covered management claims or investigations can generate legal and professional costs before liability is determined, subject to the insured section and policy wording.
A Livestock & Property Agent business terminates an employee after ongoing performance and workplace issues. The former employee alleges the dismissal was unfair and seeks compensation. The business disputes the allegation, but the matter progresses to formal employment proceedings and legal representation is required. If an Employment Practices Liability section is included and the circumstances fall within cover, the Management Liability policy may respond to eligible defence costs and certain covered settlement or compensation amounts.
Outcomes depend on the specific policy wording, limits, sublimits, excesses, exclusions and circumstances of the claim.
Management Liability policies are packages of different sections and structures vary significantly between insurers. None of the following should be assumed. Areas worth reviewing include:
Management liability cover should be looked at whenever the people, entities or obligations behind the business change. Review triggers include:
A plain-English guide to management liability insurance in Australia: the sections commonly found in a policy, the exposures directors and managers carry, and how it differs from public liability and professional indemnity.
Management liability policies can differ widely between insurers. Why limits, sublimits, exclusions and the definition of who is insured are worth checking as a business changes.
Freely available artificial intelligence tools are helping drive record unfair dismissal lodgements at the Fair Work Commission, and employers are being reminded to follow correct processes and review their insurance arrangements.
Depending on the policy arranged, it may include areas such as directors and officers liability, company liability, employment practices, statutory liability and investigations, crime or fidelity cover and eligible defence costs.
Sections, limits, sublimits and exclusions vary between insurers, so it is worth reviewing what has been selected rather than assuming a standard package.
Management Liability generally concerns how the business is directed, managed and administered, including decisions by directors and managers, employment matters and regulatory obligations.
Professional Indemnity generally concerns allegations arising from professional advice or services provided to clients. A business may need both, depending on how it operates.
Review is appropriate whenever directors or managers, staffing levels, ownership, entities, employment exposures or regulatory circumstances materially change.
Management Liability is generally written on a claims-made basis, so a review is also sensible when a known circumstance arises that may need to be notified.
Ask RMA Insurance Brokers to review the management liability arrangements for your Livestock & Property Agent business so they reflect the directors, employees, entities and management exposures in place today.
The information on this page is general and does not take into account your objectives, financial situation or needs. Consider whether the information is appropriate for you. Cover is subject to the terms, conditions, limits and exclusions of the relevant policy. Insurance products and available cover vary between insurers. Review the relevant policy documentation before making a decision.
